Good morning!
Grain futures firmer overnight… At 6:00 a.m. CDT, December corn was up 3/4 cent and hit another contract and three-year high overnight. November soybeans were 12 cents higher and hit another contract and 2.5-year high overnight. December soybean meal was up $0.20. December bean oil was 142 points higher and hit a five-week high. December SRW and HRW wheat were around 6 to 8 cents higher and both hit contract and three-year highs. Grain market bulls are keeping their foot on the gas as the calendar turns to September, defying bearish seasonal studies that suggest price weakness for the grains this time of year. The key outside markets today see the U.S. dollar index firmer. October Nymex WTI crude oil prices are higher and trading around $88.00 a barrel. The yield on the benchmark 10-year U.S. Treasury yield is presently 4.76%.
Oil tankers attacked in Strait of Hormuz… Two oil supertankers attempting to exit the Strait of Hormuz were struck late Monday by projectiles in quick succession, maritime security consultant Marisks said and as reported by Bloomberg, the latest sign of renewed hostilities around the critical waterway. “The very large crude carrier Sidr, run by Saudi Arabia’s Bahri shipping company, was hit while sailing northeast of Khasab, Oman, the consultant said. The Senegal Prosperity, operated by South Korea’s Sinokor Group, was struck by three projectiles while traveling east of the same country, it said. Both were exiting the Persian Gulf, according to Marisks,” said the report. “Renewed attacks threaten the fragile recovery in oil shipments through the vital chokepoint, which had reached roughly half of pre-war levels thanks to clandestine shuttle runs from major Middle East producers. Crude oil prices rallied on the news.
Ukraine continues attacks on Russian export infrastructure… A fire at the Baltic port of Ust-Luga has been extinguished, after the latest attack in Ukraine’s intensifying campaign against Russian energy infrastructure, Bloomberg said in a report. A total of 52 drones were downed over the coastal Leningrad region, with the attack causing a fire at the Ust-Luga port, local governor Alexander Drozdenko said in a Telegram statement on Tuesday morning, without specifying which facilities were affected. The fire has been extinguished, with no casualties, Drozdenko said in a separate statement later. “Ust-Luga, a key gateway for energy and commodity exports, loads crude oil and petroleum products as well as coal, fertilizers and grain. It’s also home to a major refinery owned by Novatek PJSC. The port has been targeted in several Ukrainian attacks, most recently just weeks ago, when a strike damaged the Novatek plant. Earlier attacks on Ust-Luga’s oil terminals also caused temporary halts in loadings,” said the report. Ukraine has been carrying out near-daily attacks on Russia’s energy and port infrastructure in a bid to reduce the Kremlin’s commodity-export revenue and its ability to supply the domestic market with oil products. Attacks on Russia’s oil-processing facilities have hit a record, causing another wave of gasoline shortages across the nation.
Scattered thunderstorms over central, eastern U.S.; heat expands in southern half of central U.S. … The National Weather Service today said heat will build over parts of the middle Mississippi Valley and central/southern Plains today and expand into the Ohio/Tennessee Valleys and the Mid-Atlantic on Wednesday and Thursday. Meantime, there is a slight risk (level 2/5) of severe thunderstorms over parts of the northern/central Plains and upper/middle Mississippi Valley and lower Great Lakes, northeast, and northern mid-Atlantic today.
USDA weekly crop progress updates… U.S. corn conditions held steady the past week, with 57% of the crop rated “good” or “excellent” as of Sunday, unchanged from the previous week and defying expectations for a one percentage point drop, according to a Reuters survey of analysts. The Pro Farmer Crop Condition Index (0 to 500 scale, 500 equals perfect), which uses state data to provide a weighted figure to track the crop through the growing season, fell 1.6 points, mainly due to minor deteriorations in the Dakotas and lower Midwest from hot, dry weather. See detailed Pro Farmer CCI ratings here. USDA said 58% of the U.S. soybean crop was rated good or excellent, down two percentage points from the previous week and a point below the average estimate. It was the fourth straight weekly decline for soybean ratings. The Pro Farmer CCI for soybeans fell 1.44 points to 357.55. USDA said 77% of the U.S. spring wheat crop was harvested as of Sunday, up from 62% a week earlier and ahead of the five-year average for this time of year of 68%. Analysts had expected the harvest to be 75% complete.
Pro Farmer crop consultant lowers U.S. corn yield… Our crop consultant, Dr. Michael Cordonnier, in his weekly report has lowered his 2026 U.S. corn yield by 1.0 bushel this week, to 178.0 bu/ac, with a neutral-to-lower bias. “Hot and drier weather forecasted for this week may accelerate the maturation of the crops that were already ahead of schedule, especially in the western Corn Belt.Overnight lows will be well above normal and may stress remaining kernel filling for the corn crop.A quick end to the growing season could limit kernel depth and kernel weight,” he said. “It has become obvious that corn was more impacted by adverse weather in August than soybeans.”Meantime, Cordonnier’s 2026 U.S. soybean yield was left unchanged this week at 51.5 bu/ac, with a neutral bias. Higher temps “could result in a quick end to the growing season, especially in the western Corn Belt.When the season ends prematurely, yields can be trimmed due to smaller seeds and lighter seed weight,” said Cordonnier.
EPA ruling on refinery exemptions “could have been worse”… Pro Farmer Editor Bill Watts reported that seems to be the reaction from farm and biofuel groups after the Environmental Protection Agency on Monday announced small refinery exemptions (SREs). The agency granted exemptions totaling 1.76 billion blending credits, known as RINs – far above the roughly 900 million credits it had previously penciled in. Talk that EPA could grant upward of 1.8 billion in exemptions sparked furious pushback by farm and biofuel groups and farm-state lawmakers in recent weeks. It also put pressure on soybean oil futures, which have seen significant volatility. Softening the blow, EPA said it would reallocate 100% of the difference between the projected and actual exempted volumes for 2025 SREs into the 2026 and 2027 Renewable Volume Obligations before the end of October. In other words, the required blending will be shifted from refiners who won exemptions to other refiners. The American Soybean Association, which last week warned that exemptions on the order of 1.8 billion RINs would eliminate around 500 million gallons of biomass-based diesel demand and cost U.S. soybean farmers around $1 billion in lost revenue, welcomed EPA’s Monday decision but urged policymakers to move quickly. “We appreciate the administration’s commitment to reallocating 100% of these additional exemptions and their intention to enter into supplemental rulemaking soon, but timing is critical,” said Dave Walton, ASA vice president and an Iowa soybean farmer.
“Global Bond Sell Off Sends Yields to the Highest Level Since 2008”… That’s a Bloomberg headline overnight. “Global bond yields climbed back to the highest level in almost two decades as rising oil prices fueled inflation concerns and investors ramped up expectations for interest-rate hikes. The move started on Friday after Federal Reserve Chairman Kevin Warsh doubled down on his vow to finally tame inflation, and was extended this week as energy prices rose on renewed conflicts in the Middle East,” said the report. “The rate on 10-year Japanese government notes touched 3% for the first time since 1996, U.K. 30-year yields reached the highest since 1998 and the 10-year Treasury rate hit levels last seen January last year. The yield on a Bloomberg gauge of global sovereign bonds advanced for a fourth straight session on Monday, rising to 3.72%, the highest since mid-2008,” said the report.
USDA fats and oils report out today… The U.S. soybean crush likely increased in July to a four-month high of 6.605 million short tons, or 220.1 million bushels, analysts said ahead of this afternoon’s monthly USDA fats and oils report. If the average of estimates gathered from analysts by Reuters is realized, the crush would be up 1.1% from the 217.8 million bushels processed in June and up 7.3% from the July 2025 crush of 205.1 million bushels. However, the estimated average daily crush rate of 7.101 million bushels per day would be down from a three-month high of 7.260 million bushels a day in June. “U.S. soybean processors have expanded crush capacity in recent years to capitalize on rising demand for soyoil to produce biofuel. Grain trader Archer Daniels Midland last month announced upgrades to four of its plants that would increase the U.S. crush by about 1% over 2025 levels, citing strong demand for renewable fuels,” said the report. U.S. soyoil stocks as of July 31 were estimated at a seven-month low of 1.878 billion pounds, based on the average of estimates from analysts surveyed by Reuters. Estimates ranged from 1.650 billion to 1.966 billion pounds, with a median of 1.925 billion pounds. The estimate reflects a 10.4% drop from 2.097 billion pounds in stocks at the end of June, but a 0.2% increase from stocks totaling 1.874 billion pounds at the end of July 2025.
Eurozone inflation hits three-year high… Eurozone annual inflation accelerated to 3.3% in August 2026 from 2.9% in July, in line with market expectations, according to preliminary estimates. The rate reached its highest level since September 2023 and remained well above the ECB’s 2% target, driven largely by a surge in energy prices amid continued fighting in the Middle East. The data strengthened expectations for an ECB rate hike as soon as this month, with markets fully pricing a 25-basis-point increase to 2.5%. Energy inflation jumped to 14.3%, its highest since January 2023, while unprocessed food and non-energy industrial goods inflation also accelerated. Services inflation, however, eased to a four-month low of 3.0%, while core inflation, excluding energy and food, edged down to 2.4%, below forecasts of 2.5%. TradingEconomics.com
John Deere tractors now have AI to help in farming decisions… “Farmers are getting some help sorting through the reams of data collected by their high-tech tractors: An AI assistant named JD built into Deere & Co.’s Operations Center mobile application,” Bloomberg reports. “The chat bot can help leverage data specific to growers’ fields, with information collected when crops are being planted, treated or harvested. That can help inform choices, for instance, on whether fields need more fertilizer or less. ‘We think there’s hundreds of decisions that economically matter for a farmer throughout a season,’ Deanna Kovar, worldwide president of agriculture and turf at Deere, said in an interview. ‘JD is now the researcher for the farmer — the data analyst — to go seek out those answers and do it in a much more efficient way, ‘ ” said the report. As part of the rollout of the JD assistant, Deere also released its “farmer data commitment” that reiterated that growers control their own information, and that Deere never sells it. Some growers have become wary about sharing crop totals with USDA as well as other entities amid fears it could be misused.
Malaysian palm oil futures rally… Malaysian palm oil futures on Tuesday jumped near 2% to near MYR 4,900 per MT, extending the previous session’s rally and hitting a one-week high as traders returned from a holiday. Sentiment was lifted by firmer edible oils on the Dalian and Chicago exchanges, along with a weaker ringgit. Stronger crude oil prices also provided support amid renewed concerns over potential supply disruptions. Meanwhile, growing El Niño risks added to concerns over drier conditions and potential production losses across Southeast Asia. However, gains were tempered by weak export demand and ample supplies. Cargo surveyors estimated Malaysian palm oil exports fell between 11.4% and 20% during August 1-25 from the same period in July, while inventories climbed to a five-month high in July, reinforcing concerns over supply pressure. Demand from India could also face headwinds as refiners favor cheaper soyoil, although expectations for strong August vegetable oil imports may provide some underlying support.
Cattle futures see short covering… October live cattle on Monday rose $0.95 to $212.675. November feeder cattle Monday rose $0.50 to $310.425. Cattle futures markets saw more short-covering buying and corrective rebounds after hitting eight-month lows last week. Gains were limited by cash cattle trading last week at solidly lower money. USDA Monday announced a new “Ranchers First Initiative” in an attempt to address the financial risk of retaining breeding heifers. The new Beef Retention and National Development is termed BRAND. Details here. USDA at midday Monday reported cash cattle last week averaged $219.25. That compares to last week’s cash cattle trading activity averaging $225.01.
Lean hog futures bulls coming back to life… October lean hog futures on Monday rose $1.775 to $83.675 and hit a three-week high. The lean hog futures market saw more short covering and perceived bargain buying as the charts are starting to suggest the market has bottomed out. A price downtrend on the daily bar chart was negated Monday. Stabilization in the cattle futures markets the past three sessions has also benefitted the lean hog futures bulls. However, the cash hog market continues to trend down. The latest CME lean hog index down 62 cents to $91.52. Today’s projected CME index price is down another 66 cents at $90.86. The national direct five-day rolling average cash hog price quote for Monday was $90.49.